India-Russia Oil Trade To Continue Amid Trump’s ‘Tax’ing Threats But An Update On US Oil Imports
Trump recently claimed he had heard that India is no longer going to buy oil from Russia, to which New Delhi has now responded. (Image courtesy: Representative pic using AI)
US President Donald Trump’s 2nd term has been quite tumultuous and taxing in literal sense. After a 90-day pause on the reciprocal tariffs announced first in April this year, Trump on July 31 imposed a 25% tariff on India, starting April 1. In addition, he stated that a penalty will also be levied for India’s oil trade with Russia.
While Trump perhaps wants to have it both ways by taxing and penalising India and expecting New Delhi would stop its oil purchase from Russia. Recently, the US President claimed that he had heard that India is no longer going to buy oil from Russia, which he hailed as a “good step”.
“Well, I understand India no longer is going to be buying oil from Russia. That’s what I heard. I don’t know if that’s right or not, but that’s a good step. We’ll see what happens,” Trump told reporters.
Has India really stopped its oil purchases from Russia?
Trump’s claims seem far from reality as there has been no such development. Government sources on Saturday (August 2) dismissed Trump’s claim, saying the supply decisions are guided by price, grade of crude, inventories, logistics and other economic factors. Sources told ANI that Indian oil refiners continue to source oil from Russian suppliers.
India’s energy decisions have been guided by national interest but have also contributed positively to global energy stability, the sources added, supporting the government’s decision to continue sourcing Russian oil. “India’s pragmatic approach kept oil flowing, prices stable, and markets balanced.”
Why India is still buying Russian oil?
Russia is the world’s second-largest crude oil producer with an output of around 9.5 mb/d (nearly 10% of global demand). It is also the second largest exporter globally. Explaining India’s decision to continue Russia oil trade, sources shared that the fears of Russian oil being pushed out of the market drove dated Brent prices to $137 per barrel in March 2022.
“In this challenging environment, India, as the world’s third-largest energy consumer with 85% crude oil import dependence, strategically adapted its sourcing to secure affordable energy while fully adhering to international norms,” sources said.
“These are long-term oil contracts,” one of the sources said. “It is not so simple to just stop buying overnight.”
How much oil India imported from Russia?
Globally, the second biggest oil exporter Russia is also the leading supplier to India. It accounts for about 35% of the overall supplies. In this year between January and June, India has imported about 1.75 million barrels per day of Russian oil, up 1% from a year ago.
What about India-US oil trade?
There’s a positive development on this front too. Amid tariff tensions with Trump, it is pertinent to note that India has significantly increased its crude oil imports from the US since Trump began his second term, according to trade data cited by ANI. India’s oil imports from the US have jumped by over 50% as compared to the previous year.
“From January to June 25, India increased its imports of US average crude supplies by 51% compared to the same period last year,” government sources revealed.
